Inside Google's shadow workforce of contract labourers

A man wearing a sweatshirt with a Google logo waits for a bus in front of the company's headquarters in Mountain View, California, on April 25, 2018.
A man wearing a sweatshirt with a Google logo waits for a bus in front of the company's headquarters in Mountain View, California, on April 25, 2018.PHOTO: BLOOMBERG PHOTO BY DAVID PAUL MORRIS

SAN FRANCISCO (BLOOMBERG) - Every day, tens of thousands of people stream into Google offices wearing red name badges. They eat in Google's cafeterias, ride its commuter shuttles and work alongside its celebrated geeks.

But they cannot access all of the company's celebrated perks. They are not entitled to stock and cannot enter certain offices. Many do not have health insurance.

Before each weekly Google all-hands meeting, trays of hors d'oeuvres and, sometimes, kegs of beer are carted into an auditorium and satellite offices around the globe for employees, who wear white badges. Those without white badges are asked to return to their desks.

Google's Alphabet employs hordes of these red-badged contract workers in addition to its full-fledged staff. They serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams - a sea of skilled labourers that fuel the US$795 billion (S$1 trillion) company but reap few of the benefits and opportunities available to direct employees. 

Earlier this year, those contractors outnumbered direct employees for the first time in the company's 20-year history, according to a person who viewed the numbers on an internal company database.

It is unclear if that is still the case. Alphabet reported 89,058 direct employees at the end of the second quarter. The company declined to comment on the number of contract workers.

Other companies, such as Apple and Facebook, some of the most cash-rich public companies, also rely on a steady influx of contractors. Investors watch employee headcount closely at these tech powerhouses, expecting that they keep posting impressive gains by maintaining skinnier workforces than older corporate titans.

Hiring contractors keeps the official headcount low, and frees up millions of dollars to retain superstars in fields like artificial intelligence.

The result is an invisible workforce, off the company payrolls, that does the grunt work for the Silicon Valley giants with few of the rewards.

"Many of these workers don't have a voice on the job. They don't necessarily get the benefits that many of us think about when working at a big, glitzy tech company," said Ms Maria Noel Fernandez, campaign director for Silicon Valley Rising, a union-backed group based in San Jose, California that advocates on labour and housing issues. "And they're not really part of this wealth."

Contractors are on the rise at Google as the company spreads into new markets, such as devices and corporate services, which demand a larger salesforce. Conversations with more than 10 former contractors for Google and other Alphabet units paint a portrait of a permanent underclass.

Google has a name for them: TVCs, or "temps, vendors and contractors".

They are employed by several outside agencies, including Adecco Group, Cognizant Technology Solutions, and Randstad. Google declined to say how many agencies the company uses. 

Many current and former contract workers and full employees declined to speak on the record because they did not want to jeopardise their employment.

Some direct employees took unusual steps this year to go to senior leadership with objections about the company's work with the military, its gender pay gap and its nagging issues with online harassment.

Another issue Google employees are discussing bringing to management is the state of the contract workforce, according to four people familiar with the conversations.

Ms Yana Calou, an organiser with advocacy group who speaks with Google employees and contractors, said that both groups are concerned about the workers who are not full Google employees.

"They feel isolated, precarious and like second-class citizens," Ms Calou said. "It's a microcosm of what's happening in the economy as a whole."

In an e-mailed statement, a Google spokesman said the company hires TVCs for two primary purposes. One is when the company does not have a particular expertise in-house, such as shuttle bus drivers, quality assurance testers and doctors. Another is for filling temporary positions to cover for parental leave or spikes in work.

Some contract workers viewed Google as a generous workplace that boosted their careers. Still, despite their ubiquity there, many felt peripheral.

Several noted the subtle slights apparent from their arrival. The first thing people eye at work, one former TVC recalled, is the colour of someone's badge. TVCs are not trusted with tasks outside their limited purview.

Four different contractors described the sinking feeling of clocking in at 9am only to see full-timers trickle in an hour or two later. The same staff would leave the office around 3pm, often after a mid-day gym break.

"People look down on you even though you're doing the same work," said one contractor who spent two years at Google managing multiple other employees. Said another ex-TVC: "You're there, but you're not there."

Googled hired Dozens of temporary workers more than a decade ago, to photocopy dog-eared pages for the company's free digital library, Google Books. Like the company itself, the number of temporary workers has grown wildly.

Like other firms, Google relies on outsourcing operations in South-east Asia - rows of office workers in India and other countries that label mapping data and handle other relatively simple computing work.

But Google also hires highly educated contractors in its backyard. Some TVCs arrive with advanced technical degrees and years of experience, working on niche efforts like renewable energy and sensor design.

Several former contractors noted that Google does offer benefits for contractors that other large companies do not. TVCs can eat at cafeterias for free and use some company facilities like its bowling alleys and gyms.

For many, a TVC position offers a foothold for a permanent role at Google or elsewhere.

Some TVCs are paid well. Contract software designers and other specialists were offered as much as US$150 an hour before taxes, above rival giants, according to two people familiar with the plans. 

Vendors doing less technical work made less; one 2017 hiring contract in Europe, viewed by Bloomberg News, listed an annual salary of 28,000 euros (S$44,511). 

Under chief financial officer Ruth Porat, Alphabet has tightened its once freewheeling spending. Yet the company has not stopped its appetite for expensive engineers, who can easily fetch US$1 million a year or more. That decision necessitates more contractors.

Every company division must petition for a budget and staff headcount. Talented engineers are pricey and take bites out of the budget. To compensate, managers will then fill out staff with TVCs, according to Mr José Benitez Cong, a former Google hiring manager who runs the human resources firm Plause.

Contractors can offer a potential regulatory break, too. Seattle recently weighed a tax based on the staff headcount companies have, a way to reap more from local giant Amazon. Officials in Google's hometown have voiced support. A spokesman for Google declined to comment.

Google's lengthy hiring process is also factor, Mr Benitez Cong said. Google employees can take several months to recruit, whereas the company can tap TVCs within weeks or even days. They can also be dismissed just as quickly.